Indian stock markets ended a lackluster trading session on a subdued note, with the Sensex and Nifty closing lower as investors exercised caution ahead of the US Federal Reserve's policy meeting. IT and metal stocks weighed on the benchmark indices, while the real estate sector bucked the trend, driven by optimism about future housing demand. This cautious sentiment reflects a market awaiting clarity on the Fed's stance on interest rates, which could have significant implications for global and domestic markets.
Market performance:
The Sensex shed 384 points, or 0.5%, to close at 81,748, while the Nifty declined 100 points, or 0.4%, to end at 24,668. Trading activity was relatively balanced, with 2,221 shares advancing and 1,749 shares declining. The India VIX, a measure of market volatility, spiked intraday but later moderated, reflecting the underlying uncertainty.
Sectoral performance:
- IT and Metals Drag: The IT and metal sectors were the major laggards, with the Nifty IT index snapping its five-day winning streak and the Nifty Metal index falling nearly 1%. Concerns about tapering projects, softer demand, and weak global metal prices contributed to the decline in these sectors.
- Real Estate Defies Trend: The Nifty Realty index bucked the trend, rising 3% on hopes of strong housing demand in 2025, fueled by new launches, potential rate cuts, and favorable demographics.
- Mixed Performance in Other Sectors: While some sectors like FMCG and banking witnessed declines, others showed resilience, reflecting a mixed market sentiment.
Key market movers:
- Losers: Titan, TCS, Adani Ports, Hindalco, and BPCL were among the top losers on the Nifty 50.
- Gainers: Dr Reddy's, IndusInd Bank, Bajaj Finance, HDFC Life, and Power Grid were among the top gainers.
Market outlook:
Analysts expect the Indian markets to remain in a consolidation phase until clarity emerges from the Fed's policy meeting. A potential rate cut or dovish commentary from the Fed could boost market sentiment, while a hawkish stance or any negative surprises could trigger a correction. Looking ahead, the Q3 FY25 earnings season in January and the Union Budget in February are expected to be key market triggers.
The Indian stock market's subdued performance reflects a cautious approach by investors as they await the outcome of the US Federal Reserve's policy meeting. While concerns about specific sectors and global economic cues weigh on sentiment, pockets of strength in sectors like real estate offer some optimism. The Fed's decision on interest rates and its future policy guidance will be crucial in shaping market direction in the coming days. Investors are likely to remain watchful, seeking clarity on the global economic outlook and its potential impact on domestic markets.
